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HomeMy WebLinkAboutP-0290 - Summary of Capital Policy Revision - 4-24-2007Adopted 04/2412007 4 Orange County Board of Commissioners Proposed Capital Funding Policy Preamble This apital funding policy is the product of extensive analysis and deliberation. ` this � erat�on� The intent of this policy is to reflect greater priority than there has been historically y o n providing funding for county projects, with paficular emphasis directed at enhanced upkeep of existing, county facilities; The policy reflects the implementation of the Board of Commissioners' � rr�issioners resolution of November 1 , 2004 that the Board `'does hereby adopt In policy of allocating a target of 60 percent of capital expenditures for school projects and 40 percent f capital expenditures for court projects over the decade I� l beginning in calendar year 2005 ": This policy continues the County's and hr i � � t principle torical practice of funding all school and county related debt service obligations before allocating an others g School or county capital funds {for other purposes. Long Range capital Investment Flan During October of each fiscal year, the County Manager shall resent p , to the Ford, ten- year county and School capital needs and funding it cans in the form of a Capital pal Investment Plan. Each year, the Board of Commissioners shall conduct a public hearing the Manager's Recommended clP during November and subsequently adopt a ten - year Capital Investment Plan lP). The first year of the adapted tern- -gear Capital Investment Plan shall become une the bass for the annual capital budget and incorporated into the next annual operating p rating budget recommended by the county Manager. County and School recurring capital needs will be identified and reviewed e during each annual operating budget cycle, and recurring capital appropriations will be approved b Board p pp the d of Commissioners a -an element of each annual Orange County Budget Ordinance. The ten -rear plan for long -range capital funding shall include= Anticipated County capital expenditures costing or more equipment g Anticipated school capital expenditures costing $50,000 or more excludin equipment) . . g • Equipment costing $5,000 or more Sources of Funds The county will allocate the following sources of funds for count and B ' . chox�l debt service and long -range and recurring capital: • . All proceeds from the Article 40 and Article 42 half-cent sales takes. (The North Carolina General Statutes require that 30 percent of the Article 40 (NCGS§105-487(a)) and 60 percent of the A►ticle 42 (NCGS§105-502(a)) sales tax Adopted 041241200 revenue be earmarked for public school CaPital outlay as defined in I GS §10 -426(0 or to retire any indebtedness incurred by the county for these purposes) 0 School Construction Impact Fees for each school system. • Public School Building Capital Fund monies ue sufficient to all debt service on remaining 1988, '1992, 1997, Property tai revenue P or 200 bonds, 9 or refinancings thereof$ as well as alternative financing programmed in the debt issuance schedule approved the Board on May , 2004 and any subsequent updates to that schedule as the Board may approve. • It is the intent of the Board of County commissioners to dedicate the equivalent of four annual ad valorem property tax to funding recurring capital expenditures cents on the p p � the cents acrd county I cent). However, there will be titres when for schools (three } e bound fiscal! and unable to achieVe full funding* During those dines, County will � b o�-�I 8 be may find it necessary to depart from the Policy. During the 20 cr�rn��ro y ' t Plan development process, the Board will consider timetable for Capital Investment p P ent phasing in the additional tiro— cents necessary t fully the recurring capital component of this policy. to a abut need not, be adjusted with each qua fr nnial revaluation o (This 4�n� rate y, . "revenue neutral" earmarking) . the count will budget IBC Education Lottery Beginning �n fiscal year 2007 � y g , r�. arrears" — me n-In that funds will be budgeted in the year after the State proceeds �n 9 distributes thee. For example, le lottery p roceed distributed to the county during the upcoming 007-0 fiscal year would b budgeted the following fiscal year, 2008 -09. � Debt service elated debt service III county and School r obligations would be funded prior to allocation 9 of programmed funding for any other capital purposes. All proceeds from annual allocations of North Carolina Public School Building capital Funds will be earmarked explicitly to pay for eligible school debt service. Schools' impact fees will be earmarked explicitly to pay for debt service on Orange county B p projects that involved the construction of new school space in the orange County Schools ystern Chapel Fill- carrboro City Schools' imptict fees will be earmarked explicitly to pay p for debt service on projects that involved the construction of n school space in the Chapel bill- carrboro city Schools system, NIC Education Lottery Proceeds Beginning �n fiscal ` year 2008 -09 each school district will have the option to dedicate its l l Education Lottery monies either (1) to repay debt service for debt share of the annual � ear 2006 -�07 to. address school facility renovation needs or (2) as an issued after fiscal . . .. to the districts pay-as-you-go funding to address school facility additional revenue If either district chooses to dedicate Lottery proceeds to repay debt renovation needs. � service, Lottery proceeds, sufficient to cover annual debt payments for principal a nd interest, will be dedicated for the life of the financing. . Adopted 04/2412007 Beginning in fiscal year 2008-09, during the first quarter of each year, County staff will request, from the State, the amount of monies accumulated in the Lottery fund for both school districts with the intent of expending those funds during the fiscal year for either debt service payments or individual School capital projects as identified by each districts during their annual update of their ten -year capital plan. Allocation With the exception of the revenues earmarked for School and County recurring capital and the Construction Management function, the net proceeds of all programmed revenue sources after debt service obligations 'have. been satisfied will be allocated on the basis of 0% to schools and 0% to the County. Capital funding for each tern -year capital planning period will be - allocated between the two school systems based on certified student membership as of November 15 each year. Capita! Project ordinances — Form and Purpose All funds allocated to capital projects are to be accounted for in a Capital Project Fund as authorized by a Board of County Commissioner approved Capital Project ordinance. The Capital Project ordinance will include a detailed break down of each major cost category related to the project. In accordance with the Board of County Commissioners November 2000 adopted "'Policy on Planning and Funding School Capita! Projects", whenever School capital project bids are either higher or lower than originally projected, or any other factor affecting the project budget occurs, the affected school system is expected to work with County Management.- and Budget staff to present revised capital project ordinances for adoption by the Board of Commissioners. The same expectation shall be applicable for changes to County Capital project budgets. Community Use of Schools It is the intent of the Board of County Commissioners to evaluate each new proposed school in both School Districts for joint community use opportunities, including, but not limited to, park and recreation use. Recurring Capital As outlined in the "Sources of Funds' section of this policy, recurring capital funding for the Schools and County will be based on the estimated proceeds of 4 cents on the annual General Fund property tax rate. `I'"`he proceeds from 3 cents Will be earmarked for schools, with funds allocated to each school system for the next fiscal year based on each system's respective share of the student membership as of November 1 Immediately preceding the next fiscal gear. Proceeds from I cent on the tax rate will be earmarked for Counter recurring capital needs. With regard to County Equipment and vehicle 'acquisitions accomplished using third party financing, the Board of County Commissioners will determine the source of funding to repay the associated debt service at the point that the Board approves the financing arrangement. rol Adopted 04/24/2007 7 Construction Management Function Beginning with the 2005-06 fiscal year, the hoard of Commissioners will appropriate funding to establish a Construction Management function to oversee County and School capital projects. In fiscal years 2005-06 through 2007-08, $100,000 will be allocated annually to fund this function. The source of funding for the Construction Management - function will be split on a 60/40 basis with each school district sharing the schools portion of funding (60%) in accordance with certified student membership as of November 15 each year. Each entity's share of this function will be deducted from its share of long-range capital funding prior to allocating capital funds. Schools Adequate Public Facilities Ordinance Orange County's Schools Adequate Public Facilities Ordinance SAPFO and Memoranda of Understanding (Molls) between the County and its municipal and school partners establish the machinery to assure that, to the extent possible, new development will take place only when there are adequate public school facilities available, or planned, which will accommodate such new development. The Board of County Commissioners is committed to the principle that new school space documented as needed through the annual SAPFO technical review process will be reflected in the next adopted CIP, and will be funded so as to be constructed to be available before the relevant level of service threshold is exceeded. Rescission This policy rescinds the Orange County Board of Commissioners Capital Funding Policy, as originally approved on December 7, 1996 and as amended on February 3, 1998 and June 23, 2005. Approved April 24, 2007.